Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya has refuted allegations that the bank is involved in illegal cash dealings in any “shape or form”.
BY TATIRA ZWINOIRA
RBZ has been accused of deploying runners on the streets to mop up foreign currency to meet the country’s growing import obligations.
Mangudya told guests at a breakfast meeting organised by the Confederation of Zimbabwe Industries (CZI) that RBZ was not involved in illegal cash dealings.
“We do not participate in buying or selling cash on the streets … we do not do that at all. The money that is kept by the Reserve Bank goes through the normal banking system and normal banking agencies,” he said.
Mangudya was responding to Zimbabwe National Chamber of Commerce president, Divine Ndhlukula, who asked what the central bank was doing to stem cash barons oiling the parallel market.
Mangudya said there were some “cartels, wherein, the retailers, when they collect their cash, they do not bank it, it goes through the same cartels”.
He said some of the tactics being used were to keep cash that they would have received, call the cash agents, who then make a real time gross settlement transfer into the retailers account in exchange for hard cash.
“We are also investigating all those social media pictures showing bricks of cash and we are making good inroads into those investigations,” Mangudya said
Banks and retailers have been identified as the main sources of the cash being sold on the parallel market.
The growth of the parallel market led to President Robert Mugabe last week enacting Statutory Instrument 122A of 2017 — Exchange Control (Amendment) Regulations 2017 (No 5) — which criminalises illegal cash dealing and prescribes a 10-year jail term.
Mangudya said 20 foreign exchange dealers had been nabbed and the central bank “is still counting” the cash seized.
“All I can tell you is that 20 people, who were doing that (illegally trading foreign currency), the funds have been taken from them and last night [Tuesday night], they (RBZ officials) were still counting the money,” he said.
Pressed further to elaborate on the actual figures, Mangudya said: “If they were still counting from yesterday (Tuesday), do you not think it is a sizeable amount? I cannot give figures now.”
Cash dealers are on RBZ’s radar for price increases.
Since many shops used to go to these dealers to get hard cash, dealers were charging excessive premiums of between 40% and 45%. This forced companies purchasing the cash to recoup the cost of the premiums by increasing prices.
Mangudya said that investigations into the sources of the parallel market cash were still ongoing.
There is $175 million in bond notes and less than $200m in United States dollars circulating in the economy, which analysts say is inadequate to meet the needs of the market.